FCA is consulting on changes to CASS chapter 7A and, in particular, on proposed changes affecting the return of client assets. The consultation follows Treasury’s proposals on changes to the Special Administration Regime for investment firms. Among the key proposed changes are:
- amendments to allow certain transfers of the client money pool (CMP) not permitted in the current rules;
- requirements to work with the bar date mechanisms in the Treasury’s Regulations to ensure an appropriate level of client protection prior to a final distribution of client assets;
- applying hindsight to valuation of cleared margin transactions; and
- expressly setting out which CASS entitlements are modified, or will not apply at all, following firm failures and other primary pooling events.
FCA seeks comments by 23 February in relation to those of the proposals that relate to the MiFID 2 and EMIR RTS (while accepting some relevant RTS are not yet in final form) and 24 April for the remainder of its proposals.